Thursday, March 10, 2016

Under Armour Cash Position is Evaporating

Cash and Cash Equivalents declined from $593 million to $129 million from FY2014 to FY2015, a 78% decline.

Cash Flow from Operations declined from $219 million in FY2014 to (Negative $44 Million) in FY2015. A decline of $263 Million

Under Armour is currently in their FY2016 1st quarter which ends March 31,2016.

How much Cash, if any, will Under Armour have at end of Q1 FY2016?

December 31,2013 Cash $347 million

March 31,2014 Cash $179 million

Q1 2014 Net Income $13.5 million

Q1 2014 Operational C/F -($147 million)

December 31,2014 Cash $593 million

March 31,2015 Cash $232 million

Q1 2015 Net Income $11.7 million

Q1 2015 Operational C/F -($176 million)

December 31,2015 Cash $129 million

March 31,2016 Cash _______________

Q1 2016 Net Income _______________

Q1 2016 Operational C/F ___________

On Wednesday March 2nd, a week after Under Armour filed their 10K , The Sports Authority filed bankruptcy and announced the closing of 140 of its 463 stores. Analysts estimate that The Sports Authority generated revenue of $3 billion in 2015. The bankruptcy filing lists Under Armour as one the largest creditors with $23 million in receivables.

Under Armour immediately came out with an (8K) announcement DEFENDING its FY2016 guidance and stated The Sports Authority will not have an effect on FY2016 projections.

ON March 3,2015 Morgan Stanley came out with a Bearish call on Under Armour with an Under Weight rating. Morgan Stanley noted concerns regarding :

Under Armour FWD PE 65X FY2016 est. compared to other high growth retailers averaging a PE multiple of only 23.

Performance Sports Group (NYSE: PSGE $3.61) owner of Bauer and Easton and other brands saw its stock fall Tuesday down 65% on the day closing at $4.00. The stock is down from $21(-82%) in less than a year. City Sports and Team Express, two PSG customers both filed bankruptcy in 2015.